Healthcare Reform

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As the legislation exists in summer 2011, the Affordable Care Act will provide for tax credits to help individuals afford health insurance coverage beginning in 2014. If your family income is between 100 percent and 400 percent of the Federal Poverty Level (approximately $10,830 to $43,000 for individuals and $22,050 to $88,000 for a family of four, according to 2010 guidelines), then you may qualify. These tax credits will lower your total tax bill, but they can also be used before tax time to reduce your premium payments, copayments, co-insurance, and deductibles.

The new health care law makes it easier to obtain health insurance in the following ways:

The new law creates health insurance exchanges for those who can’t get coverage through their job. Exchanges will be set up in every state to provide “one stop shopping” so it will be easier to compare plans and prices. If you are eligible for insurance through an exchange and do not purchase it, you will be subject to a penalty. Exchanges start offering insurance in 2014.

All health plans in the exchanges must cover a range of benefits. These include medical, mental health, prescription drugs, and rehabilitative services. You will be able to pick among four levels of coverage to fit your needs.

If you have been uninsured for six months and have a pre-existing condition, you may be able to get coverage. This coverage — also known as “high risk pools” — should be available in your state by late 2010. It will continue until the exchanges start in 2014.

If you have been uninsured for at least six months and have been denied health coverage because of health problems, you may be able to get coverage now. This coverage -- called the Pre-existing Condition Insurance Plan -- is already available in your state. This program continues until exchanges start in 2014, when you will be able to get insurance through the exchange regardless of your health status.

Exchanges are new marketplaces where you will be able to shop for health insurance. You’ll be able to compare the benefits and costs of health plans side-by-side. You can get information about the costs when the exchange begins enrollment in every state in late 2013. Coverage starts in 2014.

Medicaid is a state-administered assistance program that uses federal and state funds to pay medical bills for

low-income pregnant women,

children under the age of 19,

people over 65, and

those who are blind, disabled, or who need nursing home care.

Combined with the benefits of the Children's Health Insurance Program (CHIP), which provides coverage for more than 7 million children up to age 19, low-income children are often covered even though their parents and individuals without children are not covered at all.

The Affordable Care Act passed in 2010 will increase the number of people covered by Medicaid by including adults without children and raising the maximum income you can earn before being eligible for Medicaid. Current income requirements for Medicaid vary from state to state but that will change when the new healthcare provisions go into effect. Beginning January 1, 2014, no matter where you live, your state will be required to provide benefits to eligible beneficiaries who make less than 133 percent of the Federal Poverty Level (FPL). This currently equals approximately $14,000 for an individual and $29,000 for a family of four.

The new health care law makes key improvements in insurance practices: As of 2010, insurance companies can’t drop your health coverage if you become sick. Your health insurance is guaranteed, as long as you pay your premiums.

Insurance companies can no longer place lifetime or restrictive annual limits on your health coverage. This change will ensure that your benefits won’t run out when you need them the most. The ban on lifetime limits begins in 2010, while the ban on annual limits begins in 2014.

Starting in 2014, you cannot be denied health insurance because of a pre-existing condition.

Key provisions of the Affordable Care Act passed in 2010 recognize that many of us fail to get the care we need to prevent serious illness. Cardiovascular disease is a leading cause of death and disability in the United States, but it does not have to be that way. There are many things we can do to lessen our risk for cardiovascular disease and many other diseases. The Act has earmarked $15 billion to create the Prevention and Public Health Fund to invest in proven prevention and public health programs to help Americans lose weight, stop smoking, and adopt other healthy habits. The Act makes taking advantage of preventive services, such as screenings, vaccinations, and counseling more appealing and affordable by eliminating deductibles, co-payments, and co-insurance for employer-sponsored health plans or individual health insurance policies created after September 23, 2010, including preventive services specifically for children and pregnant women. However, some plans may charge you for out-of-network providers and office visits.

The healthcare law adds benefits to help make your Medicare prescription drug coverage more affordable. If you reach the Medicare Part D coverage gap, you can get discounts on your prescription drugs. The discounts will gradually increase until the coverage gap disappears in 2020.

Here’s how it works:

2012: You got a 50% discount on brand-name and a 14% discount on generic drugs.

2013: You’ll get a 52.5% discount on brand-name and a 21% discount on generic drugs.

2014: You’ll get a 52.5% discount on brand-name and a 28% discount on generic drugs.

2015: You’ll get a 55% discount on brand-name and a 35% discount on generic drugs.

2016: You’ll get a 55% discount on brand-name and a 42% discount on generic drugs.

2017: You’ll get a 60% discount on brand-name and a 49% discount on generic drugs.

2018: You’ll get a 65% discount on brand-name and a 56% discount on generic drugs.

2019: You’ll get a 70% discount on brand-name and a 63% discount on generic drugs.

2020: The Medicare Part D coverage gap is completely closed.

How much you’ll pay out of pocket for each drug may vary depending on your Part D plan, the prices your plan negotiated, and how it has structured its gap coverage.

You no longer have to pay some of the costs for preventive care. This includes services such as immunizations, mammograms, and other screenings for certain cancers and diabetes.

Your state has the option in 2014 to make Medicaid available to more people. Your state can also decide not to make this change.

You may be able to get tax credits to help you pay for health insurance you buy in the exchange. The amount of help you can get depends on your income.

Insurance companies can no longer drop your health coverage if you get sick. Your health insurance is guaranteed as long as you pay your premiums.

Insurance companies can no longer place lifetime or restrictive annual dollar limits on your health coverage. This ensures that your benefits won’t run out when you need them the most. The ban on lifetime limits started in 2010. The ban on annual limits begins in 2014.